How to spend less on meds (and more on margs)

November 3, 2021 • Issue #118

Hi y’all —

Frozen margaritas, hardcover books, cool AirBnbs: These are a few of my favorite things. I'll hand over my card to buy 'em without blinking an eye. The cost is always worth it because the return on investment — my happiness — is so high.

But for every purchase that makes me want to break into song, there's an item I absolutely loathe spending money on. I haaate, for example, having to pay ticket service fees. It gives me physical pain to remember all the overpriced salads I've purchased on frantic 10-minute lunch breaks in Manhattan. And don’t even get me started on my prescriptions.

It seems ridiculously unfair that I have to pay so much in order to get my body to do the things it should naturally do! The pricing is so opaque, too, which makes me even more annoyed because I don’t know why I’m paying as much as I am.

Fueled by my rage, I decided to find out. How can I make my prescriptions cheaper? Who even sets those prices?

Stacie Dusetzina, associate professor of health policy at Vanderbilt University’s school of medicine, told me there are a few major players who determine how much I pay for my prescription drugs.

First there’s the pharmaceutical company, which sets what’s called a “list price” — the maximum price a person will pay for a drug. Then there’s my health insurance provider, which works with pharmacy benefit managers (or PBMs) to negotiate the list price down based on a whole bunch of factors. My health insurance provider then generates a formulary, which is a list of drugs it’ll cover and how much it will cost the consumer (aka me).

Gerard Anderson, a health policy professor at Johns Hopkins University, pointed out there’s a significant difference between brand-name drugs and generics, or drugs for which the patent has expired so any company can sell them.

Generics make up 90% of all prescription purchases, according to the U.S. Food and Drug Administration. However, the other 10% — brand-name prescriptions — account for 79% of all drug spending.

For generics, Anderson says, “every company is selling exactly the same thing, so they compete on the basis of price — and you as a consumer do not really have to worry about it, because when you go to the pharmacy you're going to get the least expensive option.”

It’s much more of a wild West scenario for brand-name drugs. That’s why we hear horror stories about drugs like Myalept, a leptin deficiency drug that costs $74,159 for a month’s supply. That’s also why prescription drug prices are such a hot political topic, with both Donald Trump and Joe Biden making it part of their 2020 platforms.

Congress has just begun to tackle drug prices. In the meantime, let's pivot to action.

It can be difficult to change my prescription costs. The biggest reason is that, because I rely on my employer for health insurance, I don’t have a ton of choice in what providers I have (even if I may have some choice in what level of coverage/specific plan I get).

To bring down my drug costs, Anderson said I should ask my doctor and pharmacist to see if there’s a generic that does the same thing as the brand-name pill I was prescribed. If there’s not a generic, I should then inquire as to whether there’s a cheaper brand-name version or an alternative treatment I can use. Usually, the more common my condition is, the more options there are.

Another strategy is to look for manufacturer coupons or patient assistance programs to knock off a few dollars.

Here, though, I should do the math. If I have a high deductible that I have to hit before my health insurance kicks in, Dusetzina told me that I may be tempted to try to find discounts that’ll save me money in the short term. But in reality, it might be smarter to pay full price for a few fills and meet the deductible.

I can also take advantage of products like GoodRx, which is a website/app that allows me to compare various pharmacies’ drug prices and access coupons. Justin Fengler, GoodRx’s senior vice president of corporate strategy and business operations, said I don’t even have to make an account. All I have to do is show the GoodRx coupon to my pharmacist, and they’ll enter it. Boom.

I can’t combine GoodRx coupons with my health insurance, but it still may be worth a quick search.

“We partner not just with PBMs but also pharmaceutical manufacturers, retailers, everybody across the board with the goal of improving affordability,” Fengler adds. “You should see us as a resource for every option that's out there.”

THE BOTTOM LINE

(but please don't tell me you scrolled past all of my hard work)

The way drug prices are set is super complicated and involves a ton of different players all with different interests. But if I want to save money on my prescriptions, I should ask for a generic, consider finding manufacturer coupons, do some math and use a service like GoodRx.

One thing I should NOT do is independently change my habits. It’s a very bad idea to skip doses, try to stretch my supply out longer or stop taking a drug unless recommended by a physician.

“If you stop taking that medicine, you're much more likely to end up in the emergency department or going back to your doctor or have poor health — which is going to cost yourself and your health plan more at the end of the day,” Fengler says.

VIA GIPHY

RECEIPT OF THE WEEK

check out this wild celebrity purchase

VIA INSTAGRAM

The house where comedian Bo Burnham filmed his incredible/unnerving quarantine special Inside was not, apparently, some humble abode. It’s actually a two-story, 2,700-square-foot home you may recognize as the set for the ‘80s slasher movie A Nightmare on Elm Street. Also, it’s on sale for $3.25 million. I’m sure it’ll sell any day now...

INTERNET GOLD

five things I'm loving online right now

1	I can’t stop thinking about this ridiculously thorough Google Sheet of candle reviews, complete with categories for “scent family,” “fragrance notes,” “throw,” “burn,” “vessel” and “uniqueness.” Did I mention it has a glossary?
2	This dog has more energy than I think I’ve ever had or will ever have in my entire life.
3	As a longtime Jeopardy! fan, I loved this Reddit breakdown of the most successful Matts who have competed on the show. Of 165 regular-season Matts, 38 won at least one game. The No. 1 Matt, however, is Matt Amodio, who just finished a record-setting run with 38 victories.
4	Finneas’ new album, Optimist, is very good — and so is this profile of him in GQ where he talks not only about the #MeToo movement but also how his voice is like the Costco version of Adele’s: “Consumer-grade, perfectly fine, good pitch, whatever. It’s serviceable.” Read the article, then go listen to “Happy Now?”
5	No thoughts, head empty, just Timothée Chalamet reading Dune.

401(K)ITTY CONTRIBUTION

send me cute pictures of your pets, please

VIA MARY TYLER MARCH

This is Charlie, who uses FoodRx to find coupons for his catnip pawscription.

See you next week.
 

 
P.S. Do you have any clever ways you save money on prescriptions? What’s the coolest AirBnb you’ve ever seen? What book would you not get caught dead reading on the subway? LMK at julia.glum@money.com or tweet @SuperJulia on Twitter.

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